TMI Blog2018 (10) TMI 1224X X X X Extracts X X X X X X X X Extracts X X X X ..... or quarter No.2 in Form No.26Q was due to be filed on 15.10.2010 and for quarter No.3 by 15.01.2011 and for quarter No.4 by 15.05.2011, but all these TDS returns were filed on 26.02.2012. Referring to assessee's plea in view of peculiar circumstances of sub-contractors not having PAN, which were applied at a later date and hence, the delay in filing TDS returns late but the taxes were paid along with interest upto date we find merit in the plea of assessee, wherein under section 273B of the Act, if the assessee established its case of reasonable cause, which had resulted in failure of assessee to comply with the requirement of law, then penalty merits to be deleted in the hands of assessee. The facts of each case has to be seen independently and under such circumstances, reasoning of CIT(A) that the word used in section is ‘shall’ and not ‘may’ and hence, it was mandatory upon the assessee to comply with the provisions of the Act by filing the TDS return within prescribed time, cannot hold. Undoubtedly, in the said section, the word used is ‘shall’ but thereafter, the provisions of section 273B of the Act are also provided in the Statute and reading two together would show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued show cause notice to the assessee as to why the order imposing penalty under section 272A(2)(k) r.w.s. 200(3) of the Act should not be passed. However, none appeared on behalf of assessee before the Assessing Officer. The Assessing Officer held the assessee to have defaulted for a period of 587 days for quarter No.1, 495 days for quarter No.2, 403 days for quarter No.3 and 283 days for quarter No.4 and levied penalty @ ₹ 100/- for each day of delay, totaling ₹ 1,57,106/-. 6. In appeal before the CIT(A), the assessee pointed out that he had not received notice of hearing from the Assessing Officer and the order haD been passed without providing opportunity of hearing to the assessee. He also pointed out that the TDS returns were filed after paying taxes along with interest before any show cause notice was issued by the Department. The assessee also pointed out that it works in unorganized sector and it had incurred certain expenses such as professional fees, rent and contract labour, which had attracted TDS. He further stated that many of sub-contractors who had undertaken various works were not educated and were ignorant about the Income-tax laws and did not po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. We find merit in the plea of assessee, wherein under section 273B of the Act, if the assessee established its case of reasonable cause, which had resulted in failure of assessee to comply with the requirement of law, then penalty merits to be deleted in the hands of assessee. The facts of each case has to be seen independently and under such circumstances, reasoning of CIT(A) that the word used in section is shall and not may and hence, it was mandatory upon the assessee to comply with the provisions of the Act by filing the TDS return within prescribed time, cannot hold. Undoubtedly, in the said section, the word used is shall but thereafter, the provisions of section 273B of the Act are also provided in the Statute and reading two together would show that levy of penalty can be deleted in case the assessee fulfills the conditions of reasonable cause as provided in section 273B of the Act. 8. We also find that similar issue had arisen before the Tribunal in bunch of appeals with lead order in Nav Maharashtra Vidyalaya Vs. Addl. CIT (TDS) Range, Pune in ITA No.832/PN/2016, relating to assessment year 2011-12 vide order dated 07.10.2016 has decided the issue of levy of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to in sub-section (1A) of section 192 shall, after paying the tax deducted to the credit of the Central Government within the prescribed time, prepare such statements for such period as may be prescribed and deliver or cause to be delivered to the prescribed income-tax authority or the person authorised by such authority such statement in such form and verified in such manner and setting forth such particulars and within such time as may be prescribed: Provided that the person may also deliver to the prescribed authority a correction statement for rectification of any mistake or to add, delete or update the information furnished in the statement delivered under this sub-section in such form and verified in such manner as may be specified by the authority. 19. Under section 200(1) of the Act, it is provided that any person deducting any sum in accordance with the provisions of the Chapter shall pay within the prescribed time, the sum so deducted to the credit of the Central Government or as the Board directs. Under section 200(2) of the Act, any person being an employer, as referred to in sub-section (1A) of section 192 of the Act shall pay, within the prescribed time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the TDS statements is 15th July for the first quarter, 15th October for the second quarter, 15th January for the third quarter and 15th May of the immediately following financial year for the fourth quarter i.e. 31st March. The said statements could be furnished either in paper form or electronically. However, subsequent to the amendment by IT (Sixth) Amendment Rules, 2010 with retrospective effect from 01.04.2010, it was provided that furnishing of statements electronically in accordance with the format and standards prescribed became mandatory. The deductor in the said statement of tax deducted at source was compulsorily required to quote its tax deduction and Collection Account Number i.e. TAN number. Further, quote its Permanent Accountant Number except in the case where the deductor was office of Government and also quote PAN number of all the deductees. Further, the deductor was required to furnish the particulars of tax paid to the Central Government including Book Identification Number or challan indication number as the case may be. He was also required to furnish the particulars of amount paid or credited on which tax was not deducted. 21. In view of various provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l assessee before us has wrongly come to the conclusion that the provisions of section 273B of the Act do not cover the defaults under section 272A(2)(k) of the Act. We reverse the finding of CIT(A) in this regard. 22. Now, coming to the case of reasonableness put up before us by different assessee. The first plea raised by all the assessee is that where the compliance to the provisions of the Act was complicated and difficult and in the absence of any technical support in this regard, default if any, in furnishing the TDS returns late should be condoned. Another plea raised by some of the assessee was that where the tax deducted at source was not paid in time, e-TDS returns as such could not be filed and hence, the assessee was prevented by reasonable cause in not filing e-TDS returns in time and as such, no merit in levy of penalty. Another plea raised before us is that charging of fees for each day of default and then, restricting the same to the tax deducted at source was not correct. One another aspect of reasonableness was that in case the returns for quarter 1 was filed belatedly, then the returns for consequent quarters also got delayed for no default and as such, no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f various deductees. Earlier provisions were to be complied with manually by filing the TDS returns in paper form. However, as per IT (Sixth) Amendment Rules, 2010 with retrospective effect from 01.04.2010, the deductor was asked to file e-TDS statements for which infrastructure was provided and it was required that the assessee complies to the said filing of e-TDS returns. However, since assessment year 2011-12 was the first year of introduction of such facilities of e-TDS returns, there were certain hindrances which were taken care of by the authorities by way of various amendments introduced in this behalf. The case of the assessee on the other hand, is that they were small tax payers and in the absence of technical guidance provided and because of technical hitches, the TDS returns could not be filed in time. Most of the assessee before us have paid the tax deducted at source to the Treasury within time frame but have defaulted in filing e-TDS statements. In some of the cases, there is default in payment of tax deducted at source and consequently, delay in filing the e-TDS returns. The question which arises is whether in the above said scenario, can the provisions of section 27 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owever, failed to comply with notice and the Assessing Officer held the assessee to be liable for levy of penalty under section 272A(2)(k) of the Act. Before the CIT(A), the assessee for the first time offered an explanation that prior to joining regular Principal in the college on 25.01.2010, only officiating Principal had been working, who did not have idea of e-TDS statements and requirement of filing the same. The Tribunal noted that the appellate authority had accepted the explanation offered by the assessee and imposed penalty only from 01.04.2010 though regular Principal had joined the college on 25.01.2010. The Tribunal dismissed the appeal of assessee as no explanation was furnished for non-furnishing TDS statements in time. The Hon ble High Court thus, in this regard observed that the requirement of filing e-TDS statements in time could not be overlooked. In such circumstances, the Hon ble High court held that it cannot be urged by the Counsel for the assessee that no penalty could have been imposed for non-filing e-TDS returns in time since it had not resulted in any loss to the Revenue. The Hon ble High Court further took note of the fact that before the Assessing Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment year 2009-10 and in assessment year 2010-11 for all four quarter was 4966 days and in assessment year 2011-12, the delay was 3474 days. In view of the factual aspects of the case, where the delay is so huge and in the absence of any explanation of the assessee, we find no merit in the reliance placed upon on such decision by the learned Departmental Representative for the Revenue. 28. On the other hand, various Benches of Tribunal have time and again held that where there was case of reasonableness, there was no merit in levying the penalty under section 272A(2)(k) of the Act. Thus, in order to adjudicate the issue before us, we accept the case of reasonable cause as relevant to section 273B of the Act put up by the assessee in the respective cases in the appeals before us, which admittedly relate to different quarters of assessment year 2011-12. Where for the first time, there was requirement of e-TDS furnishing of TDS statement and since there were certain complications in e-filing of TDS returns because of system failure, which admittedly, was amended 18 times by the Department, the delay in furnishing the said returns late could not be attributed to the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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